Prolyl peptidases are Ser-His-Asp serine proteases that cleave proteins, peptides and hormones at N-terminal (amino-, dipeptidyl- or tripeptidyl-) or internal (endo-) proline residues. There are at least ten members in this family, each with an hydrolase fold for the catalytic subunit and either a -propeller or -helical fold for the non-catalytic subunit. Kinetic experiments have suggested that they undergo a conformational change upon substrate binding. However, the structures for the three determined over the last decade (dipeptidase IV, endopeptidase and aminopeptidase) all show both the apo- and substrate-bound enzymes in the same closed state, with the substrate completely enclosed in the central cavity. We have determined the crystal structures of a bacterial prolyl endopeptidase (PEP) that adopt an opened conformation for the apoenzyme, and an induced-fit mechanism into a closed conformation for substrate binding and enzyme catalysis. PEP cleaves internal proline residues and is involved in the maturation and degradation of peptide hormones and neuropeptides, bradykinin and angiotensin I-II (blood pressure regulation), oxytocin (bonding, trust, birth, and breast feeding), Substance P, and -MSH. Altered levels of serum PEP activity are observed in depression, mania and schizophrenia, post-traumatic stress disorder, and anorexia and bulimia nervosa. Inhibitors of PEP can reverse scopolamine-induced amnesia in rats.